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Edited version of private ruling
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Ruling
Subject: Medical expenses tax offset
Can the cost of a hyperbaric chamber be included as a medical expense for the purpose of calculating a medical expenses tax offset?
No.
This ruling applies for the following period
Year ended 30 June 2010
The scheme commenced on
1 July 2009
Relevant facts
You have dependants who have been diagnosed by legally qualified medical practitioners with Autism Spectrum disorder.
In addition to their regular therapies, their doctor has prescribed hyperbaric oxygen therapy. This treatment has been shown in trials to benefit some cases of autism, and can improve function and capacity.
You purchased a portable hyperbaric chamber for use by your dependants in your home, as such services are not available locally.
Reasons for decision
A medical expenses tax offset is available to a taxpayer under section 159P of the Income Tax Assessment Act 1936 (ITAA 1936) where the taxpayer incurs medical expenses in an income year for themselves or a dependant who is an Australian resident. The medical expenses tax offset is 20% of the amount by which the net medical expenses exceed the relevant threshold.
The term 'medical expenses' is defined in subsection 159P(4) of the ITAA 1936, and the paragraph that is relevant in your situation is:
paragraph 159P(4)(f), which includes payments in respect of a medical or surgical appliance prescribed by a legally qualified medical practitioner.
Taxation Ruling TR 93/34 explains the meaning of a 'medical or surgical appliance' for the purposes of the medical expenses tax offset.
The Ruling states that a 'medical or surgical appliance' for the purposes of the definition of 'medical expenses' in subsection 159P(4) of the ITAA 1936 is an instrument, apparatus or device which is:
a) manufactured as, or
b) distributed as, or
c) generally recognised to be
an aid to the function or capacity of a person with a disability or illness. That is, an appliance is an aid to function or capacity if it helps a person in performing activities of daily living.
This definition looks to the character of the appliance, not the purpose for which it is prescribed or used. It is not sufficient that a medical practitioner prescribes an appliance for medical or surgical ends. To be a 'medical or surgical appliance' an item must be manufactured as, distributed as, or generally recognised to be an aid to a person's function or capacity.
TR 93/34 states that generally, a household or commercial appliance is not a 'medical or surgical appliance'. The mere fact that an item gives therapeutic treatment, in that it relieves, heals or prevents a medical condition, does not make it a 'medical or surgical appliance'.
Hyperbaric chamber
Hyperbaric chambers are not manufactured and sold specifically as a medical appliance.
Hyperbaric chambers are not distributed as, or generally recognised to be a medical or surgical appliance.
Hyperbaric chambers, aside from medical uses, are also used on land and at the ocean surface:
· to take divers who have been brought up from underwater through their decompression stops, specifically to support saturation diving for which the decompression times are very long
· to train and test divers to adapt to hyperbaric conditions and decompression routines
· in scientific research requiring elevated gas pressures
· by sportspeople to enhance fitness.
Consequently, the cost of purchasing the hyperbaric chamber does not qualify for the medical expenses tax offset as the hyperbaric chamber is not considered a medical or surgical appliance and is not a medical expense under subsection 159P(4) of the ITAA 1936.